Analysis of energy consumption, economics and management at New Denmark Colliery

Sufficient energy availability and utilization lie at the core of not only the mining industry but also the economic growth of South Africa. The mining industry is one of the major consumers of electricity in South Africa; accounting for approximately 17.4 percent. The focal point of the research project was on New Denmark Colliery; an Anglo American Thermal Coal operation located in the Mpumalanga Province. The main objective of the research project was to analyse energy consumption, economics and management at the mine. The study provides a framework for understanding significant energy uses in a mining operation; electricity costs and some of the mechanisms, tools and initiatives that can be used to manage energy optimally. This provides the mining industry with a platform to become part of the energy solution in South Africa. The author conducted comparative time series studies to determine energy consumption as a function of production, specific activities at the mine, carbon dioxide emissions, electricity costs; from which the forecasts were made to determine the amount of electricity consumption and costs in the future. It can be submitted from the monthly comparative studies that more electricity is consumed during high demand season (June, July and August); as a result the costs are also very high. It was concluded that mining, ventilation and coal transportation consume relatively more electricity compared to other activities at the mine. It was further submitted that the higher the level of production the higher the quantity of electricity consumption and vice versa. It was further concluded that although the amount of electricity consumption has been fluctuating over the years, electricity costs have been escalating at an alarming rate due to change in tariff rate, inflation and the structure of the tariff. The cost of power will increase drastically over the next five years, due to uncertainty regarding the magnitude of the pending Eskom tariff increases. It was recommended that mining operations must create energy management models for their mining operations in order to reduce the amount of electricity consumption, minimize the electricity costs and secure long term electricity supply. Models created must be aligned to company vision, organizational structure and also operational practice at the mine.